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tv   Market Makers  Bloomberg  February 12, 2014 10:00am-12:01pm EST

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what live from bloomberg world headquarters in new york, this is market makers at erik schatzker and stephanie ruhle. -- live from bloomberg world headquarters in new york. how badly will the attack hurts main street successes of the digital -- digital currency? toy story. the huge box office bonanza. based on hot wheels monopoly and even a ouija board. that is weird actually. take a look at our own julianna goldman. she was rubbing elbows with top
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names from hollywood, wall street and the white house at last night's state dinner. she will be here to tell us all about it. >> i am stephanie ruhle freezing in new york city. julianna goldman ripping it up down in d.c. and erik schatzker and vail, colorado. scarlet fu is here holding down the fort early. >> getting to the newsfeed. the top business stories from around the world. starting with home depot planning to add 80,000 temporary workers. rising home prices the past few years have anchorage owners to bend on property. the senate will likely vote today on the debt limit measure passed by the house speaker john boehner. he joined the democrats in
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voting to suspend the debt ceiling for 13 months. ends three years of republicans using the threat of default to when concession from president obama. snow and ice storm hitting the south and will then head to the northeast. just two weeks after the storm or life atlanta, stranding drivers overnight. washington and new york look it up to four inches of snow. 2600 airline flights have been canceled. janet yellen got mostly positive reviews for her debut trip to capitol hill yesterday. one member of congress that it is the first time she really understood what the fed chair was saying. she will get another opportunity tomorrow and she testifies for the senate banking committee. what were your big takeaways from the big testimony? said 50-50 whether the hearing happens. janet yellen was very firm in
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talking about employment. -- peter cook said 50-50 whether the hearing happens because of the weather. the share of population working has remained relatively stable. not the participation rate, the employment to population ratio that has stayed fairly steady. there is something wrong there. how do you explain it? that is the participation rate. it has been falling to more than a decade. a lot of it is baby boomers retiring and moving out of the work force. a certain percentage is discouraged workers. she has to figure out which is which. if you push too hard, you risk inflation. a tough question and did not really give an answer as to how she would come down on that. next it speaks to the debate with an economics excels --
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itself, why is it so hard to get a handle on this? >> because it is hard to get enough data on what people are thinking and why they're dropping out. you may be ready to retire but you do not go into the labor force because you figure you cannot get a job anyway and retire early. they are trying to broaden the database to broaden this out. this is creating some confidence, but on the other hand, the quick trait -- quit rate has not gotten back to where it was before the recession. there is obviously some sort of work still there to do. there are other indicators. the participation rate, we are leaving that out. looking at the broad rate of pretty much everybody or the duration of unemployment, how long does it take you to get a more-- to get a job?
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people think it is getting a little easier to get a job. >> a lot more metrics for janet yellen and the rest of the fed to go through. you have a great interview coming up in the next hour. markets down so far this year. what will you talk to james fuller about? >> we would like to know what it would take to get the fed to change its mind on tape or. what is slow it down or reverse it? we have seen a couple of months of disappointing economic growth. janet yellen says it will be a notable change in the economy. is it that he sees will be a notable change in the economy? how low does inflation have to go until fed action? yellen mentioned the word inflation 23 times. mckee, the economics editor. do not miss the exclusive interview with the president of
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the st. louis fed. that is coming up. >> thank you. at theing a closer look markets. we are joined by barry knapp. expecting to see the s&p and year at 1900, four percent higher than it stands today. when you look at the markets, dow down three percent for the year and say this is a buying opportunity? >> not quite. is a lot ofnk there risk. what we thought would occur in the first part of the year and what we have seen so far this year is when you reach the inflection points where the fed is no longer easing, you do not have to consider it tightening butno longer easing, typically you have gotten about an eight percent pullback in the market. ultimately it will resume the of
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trend. we think we are a long ways away from a recession. would be much more comfortable biting the markets in 1700 and then by yang at 1815 or 1820. that would present a rail opportunity. would notk ago monday have been bad either. we think it will be a struggle through the first part of the year. a lot of this has to do with the fact that we had a big whenvement in earnings earnings growth was zero. up to about nine percent right now. that is what the market was discounting in the second half of last year. a sustainable move higher, and they were really discounting the acceleration in earnings growth, a lot of which is attributable up and the picking market already discounted that
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in growth. >> do you think we will get to 1730? >> i do. i think the history is pretty compelling. down eight or send subject to a fairly small deviation. i just do not think we're through with this. if you think about the policy construct, we will worry about purchases and how it will reverberate through the rest of the world. then we will worry about draining liquidity from the banking system. then we will worry about the rate hikes. why the best times for equity markets have come when fed policy has been normalized, meaning positive policy rates and stable. typically the best time for investment and when you get high multiples on earnings is when
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you actually have normal, stabilize monetary policy. >> what you are -- what was your take away from chairman yellen's testimony yesterday? >> that she is not ready to change the threshold. and that the belly of the treasury curve got hit again. that is ultimately the issue, the five-year part of the curve, not the 10 year. essence, the back end of the treasury market was telling you growth had gotten better. curveve-year part of the is telling you when they did -- when they start discounting rates, it will only raise runs -- rates one percent per year. they have never gone too slowly. they'll easily too long and go twice that fast as least. financial conditions will tighten further and that will alternately be an issue for the
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equity market. at so much that it causes correction that means we cannot be in the up trend we were in the second half of last year. >> and the next hour we're sitting down with james bullard. what do you want to hear from him to make you more bullish? we can reallyink hear anything. ultimately i disagree about the concerns about inflation. i think what you see is domestically determined service inflection is running of the target. those pressures are easing. i think people like james too pessimistic about the inflation outlook or worry too much about this inflation. i think things are starting to go the other way, including wages responding to the lower unemployment rate.
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my seat,e sitting in what would you ask him? >> i would ask them to explain why we have the disinflation and why he thinks the trends will persist and why we should be worried about that. >> thank you for joining us and doing my job for me. barry knapp giving us the latest. last night the stars came out to honor the president of france. and a moment we will hear from our respondent -- correspondent at the white house. julianna goldman. plus, another setback for bitcoin. we will dig into that as well. you are watching market makers on bloomberg television, streaming on your tablet, website and on your phone. ♪
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>> welcome back to "market ma kers." bitcoin having a bad week. the largest exchanges halted customer withdrawals, say it -- citing a denial of service attack. this follows a technical glitch that sent -- send prizes to the lowest level in two months. our own enthusiasm joins us with more. disclosure, because i am obviously a believer in the bitcoin community as well but a part of the tech site goes. transactions, i do not understand what it means. >> i am so glad you're here. if i pay for something with my
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visa card, i do not know how it works when the magnetic strip is ready either, but i know i am going to pay. the problem with bitcoin right now is a number of exchanges are not able to calculate how much money you have got in your wallet if you take it out. what they are doing to deal the problem is halting all withdrawals. you could not take bitcoin out of your account, maybe for different reasons, but you can take money out. elsean sell it to someone if you want. you can sell it on the exchange. if you have bitcoin, you can sell it to someone else or yen and can withdraw yen. the problem is, you cannot withdraw any bitcoin, so the buyers have to be willing to hold the bitcoin until they figure out what the problem is, inch means buyers are fewer
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between. >> when we first tagged in a card, visa, mastercard tom a what were the levels of hiccups or issues they went through? >> not very far back. remember christmas? target? if you used a credit card at target anytime before christmas, you could not use it for weeks after. at bitcoin price, the lowest it has been. >> the lowest it has been in two months. yes, we have a three-month chart. the lowest it has been in about two months. you say the one-day chart but we also have a three-month chart. visa astmas, target, similar -- i would not say a similar debacle, but they have issues, to. >> i think there are a couple of things to keep in mind.
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bitcoin the lowest it has been in two months but still $650. back in november, october, it was 200. a year ago it was like $30. we have come down from the $1200 high but still worth a lot of money compared to the five-year average. >> you say you are not the bitcoin expert, challenge, i think you are. >> as it relates to me, you are. regulation is growing now. use all russia make it illegal. these are the two problems. on the one hand, the technical learning curve is so steep and on the other hand, the government has trouble learning anything. >> the government has to tighten things up. anything they cannot get a handle on, they have to stop. >> matt miller giving us the
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latest on bitcoin. when we come back, we do not have to rely on secondhand reports from the white house dinner because our own julianna goldman is there and rocking it. look at that hair. very old hollywood. gorgeous. we will have that next.
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>> welcome back to "market makers." i am stephanie ruhle. the white house turned into party central last night. our own white house correspondent julianna goldman was not their reporting, she scored an invite and is here to
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tell us all about it. andt lady michelle obama you look like an old hollywood movie star. what were you wearing? >> it is addressed that in 2008 there was a fabulous sale going on and i said this is great, someday i will have an occasion to wear it. who would have guessed i would've given -- would have gotten in fight in -- got an invited to a fabulous event. >> it needed a little tailoring. >> who are the business people there? we love to save the white house hates wall street, but there were wall street hitters in the room. a fascinating mix of fundraisers and business people. artie sorensen from marriott. so he is someone who was there and has been at the white house,
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-- a bunch. elon musk sitting at a table next to me. rate mcguire from city. mcguire. i was able to mention i sat in your basement waiting for the president. tell us about the vibe of the room. party.ly was a great just a few weeks ago there was a huge amount of criticism over the fact that the same was income inequality while people will -- were eating caviar. here you are it is super lavish event. was there any cynicism in the air of should we really be doing this? >> it really wasn't. was there hours after he voted against raising the debt ceiling. he stayed until the end. this has onlya,
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been his seventh, compared to 35 that ronald reagan held around that number. held dozenske has of these kinds of events when there really is a push for austerity and cognizant of the troubled economic times over the past several years and even now. >> i was voting for you, i do not think that was the case. who sat next to hollande? >> he said that the president's table. we were in the front. there is no knows lead section but we were at the back and everyone kept to their corners. as the president's table, was there.bert ai he is a funny guy, and everyone wants him as a dinner
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partner. i see christine lagarde, john kerry. you were in good company last night. goldman looks pretty awesome today considering she was rocking and until dawn. time for us to take you on the markets. >> stocks on a five-day winning streak. not much economic data at home but we did get chinese exports increasing on the easing concerns about the slow down there. marginally. up the dow still negative right now. are falling before the government sells 24 billion dollars of 10 year notes. the yield at 2.75%. the euro weaker on speculation the ecb may consider negative deposit rates as a way to avoid deflation may get banks lending once again. oil prices moving by more than one percent of the highest since october.
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decline in cushing, oklahoma and a record number of imports from crude into china. one stock we are watching his dow chemical moving facing pressure to split from dam low. we will be back with more. ♪
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>> phil goldstein says he is no johnny-come-lately, he has been in the game for almost two decades and has had about 40 across divides in that time. now he has turned his eyes on a closed tech fund. he joins us now with an exclusive. tell us about your business. when we think activist investors, we think aggressive. you seem like a much nicer guy. think what we do is take a graduated approach. fortart out with requests taking actions that are going to increase shareholder value and often times it is not necessary.
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i think you have to have the tool in your pocket, because unless there is a threat to back it up, the manager will yes you to death. >> what is your timeline for investors? they have gotten a lot of andicism that they go in are out and the company is left holding the bag. >> we have been in investments for as long as eight years. do not see what the problem is. if someone gets a pop-up 20 or 30% in a week, i never had anyone complain about it. i think that is the reddick -- management, out by rather than fellow shareholders. >> right now the latest targets is firsthand technologies. funde firsthand technology is a closed end this mess development fund, which is a
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publicly traded venture capital fund. what they do is try to buy private securities in the tech space that are going to become public and hope for the pop. they -- their two largest holdings currently are facebook and twitter. they are looking for other investments. they only buy them in the private markets, pre-ipo. the problem is that the strategy is flawed. is the stock price is at a significant discount, 20% less than the value. value is close to 29. what we would like them to do is buy in shares. they also have a ton of cash. >> what does management say to
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you? >> management says no. when carl icahn goes to apple and says they should buy shares and there is a dispute about it, there could be a legitimate dispute with an operating company, but this is a fund. they do not really do anything with the money. the real reason they do not want to buy in shares is because the manager gets a fee of two percent on net assets. net buy in shares, the assets go down and the fees go down. >> and he gets two percent? >> basically 5 million per year whether the fund does good or bad. it has done horribly by the way over the past few years. it is a horrible performer. it was over $130 back in early
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2000. now it is $23. >> for you this is a no-brainer. where do you stand on negotiations? >> i cannot negotiate with myself. we're gearing up for a full-fledged proxy fight. a sickly, he has to go. , he has to go. ,> this is an unusual situation he paints himself as a tech guru . does not have a facebook account or twitter account and cannot locate his e-mail. we have no one to talk to. the only thing we can do is to vote through shareholders. i hope you're watching. he is looking for you. phil goldstein.
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a principal at bulldog investment. activistnt to know how investing works, this guy just told you. coming up, the upstart fashion event you do not always hear about. you do if you are cristina alesci. we will hear from the founder of made fashion week were the true hipsters go. ♪
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>> >> welcome back. i am stephanie ruhle. phil goldstein was giving us comments about firsthand tag value funds and specifically the ceo. we wanted to let you know our own team has reached out to the company and have not yet heard back from them. if we do, we will give you that throughout the show. now we have to move on because it is fashion week in new york city. sorry if you live in chicago. the critics are
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happy. some say many of the events are nothing more than an over branded trade show. founder, thes the managing director of made. also with us, our in-house total hipster. she loves fashion. surprise surprise, cristina alesci. super hot,ously look cool. tell us about your involvement in fashion week against many people feel like it is this unattainable, lincoln center only for the fashion elite. fashion week is quite diverse. lincoln center is an important part, but there are other programs that happened during the week. this is something we started in 2008 during the economic downturn to support the young, creative community. youngsed dollars and give designers free shows. we give them a platform to
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present collections. >> one of your cofounders has said this has started out as a passion project that has turned into a business. but it still is a passion project for us. businesses but we formed this to support the cumulative -- the creative community. digital platforms for the designers. with the corporate partners very closely in terms of their strategy and how they want to integrate. what are you getting from them? what are they paying you? being successful in growing into bigger designers eventually and perhaps being able to collaborate with us in the future. core toion business is the individual business.
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if they're successful, we are successful in the long run. >> you make the distinction between partners and long-run. you say the event has sponsors. big flashy sponsors. you guys do a classier thing. why the distinction? >> it is a philosophy. i think it is very important for us. our designer stay with us for several seasons and we want to make sure they grow. the partners have to look at things long-term. we look for them not to put the logo on the wall but find ways to support designers in what they do. >> we put your partners on the and others.'s these are established, they get >> she is so cool that is not even hit for her. >> how do you keep that balance
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between finding these big corporate sponsors with the partners -- the pockets and keep in that rough around the edges image? >> we are not afraid to say no. we will not have a sponsor, and for the wrong reasons. the rightme in with point of view, we would be open to that. we have developed a collections with macy's. ideawere inspired by the of the culture that exist that made fashion week. what are the young bloggers wearing and photographers wearing? >> what do you mean you have developed a collection of macy's? it is called made fashion week for macy's. we have developed a trend collection and have been with them a year now. the financial benefit from the collection -- >> you go to the immense and
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they are full of hipsters. hipsters are not shopping at macy's. we have new york fashion week here in the city, but there is also people interested in fashion in miami and los angeles. >> it you're not worried it will elude the brand? of people a lot involved in the community involved in the collection. >> what designers are you showing this week? >> the blondes showing tonight. we have had a lot of menswear designers sunday. >> you on jeremy scott. scott.jeremy i was not invited. how does lincoln square feel about what you are doing --
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lincoln center. i think we're in such different markets because we deal with the younger, creative class and work with these people not only in showing that showing that digital platforms. i think the designers showing are more established and have larger businesses. a very different thing. that has theing buzz, designers are pulling out. it needs array branding. what do you make of that, the fact that the establishment is going out of the established events? >> i cannot speak to their business or what they are doing, but i think designers make individual decisions for what is right for their businesses and sometimes it means designing for what is right for their space.
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>> you think it is all about finding the right space it? >> not sure i believe you on that. >> thank you for joining us. good luck. managing director of made fashion week. thank you to our own in-house sister, cristina alesci. isn we come back, imitation the sincerest form of show business. movie meansthe lego we will probably see more toy movies. stay with us. ♪
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>> welcome back to "market ma kers." the gnashing success on lego movie have other toy builders hoping to make their hollywood brand. here to talk to us about the
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success is the senior media analyst who joins us now from at the lego were movie and have seen a zillion youtube videos. i have a ton of lego products. is the future of midnight in paris over? >> i think that the lego movie proves that if you have the right combination of a great brand, release date february, a ton of competition out there, and a terrific marketing campaign out there, you can have a big hit with a toy-based movie. in the past there have been some hits in this regard. transformers being a really great example of that. certainly, the lego movie has an incredible building brand recognition.
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toys are the new frontier of moviemaking. in other words, superheroes. yet so many seats wrote -- superhero movies. movies based on book. theme parks. i think warner bros. has really cracked the code on this. i know this will be a major franchise for the studio. they did everything right on this one. at probably the number two and three spots for the next couple of years. we are also looking at newbies based on hot wheels and ouija board game. how translatable is something like the ouija board? >> russia and brazil in china? of these brands are not as well-known that worldwide. you have to make a movie that will translate to the global market. the way you do that is you make
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a good movie. you can have a terrific branding like stretch armstrong that is coming up and other types, but if you do not have a good movie to back it up, it does not matter about the branding. of thes ago, a lot superhero movies could not get the a-list directors. movies are full of oscar nominees and great actors and directors. i think when you have a strong performances, you're going to get more filmmakers involved, and this will be the next seeing moviesr as based on products or a book or something else like that. this is the wave of the future. >> how come battleship did not work? >> that was a different movie. it made only about 5 million in
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north america. i think the movie just did not work for a lot of people. it did not get great reviews. calling the movie battleship will not necessarily get you great box office. unless you do it right, which the studio did. every movie has to rise and fall on its own merits. i think that ouija and stretch armstrong are good movies. completely buy into this literally and figuratively if i think about all of the lego products. ouija is a stretch for me. these not have kids using . >> i agree with you. i think that it is sort of a different type of things. i do not know how you will suddenly sell a bunch of ouija boards unless it comes out. cult kind oflt -- nature attached to that.
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like it seems like a stretch. is.t that is part of it. people know the brand. when you say stretch, you think of stretch armstrong. that is definitely a brand i think they can do a lot with. basically a superhero in a way. people know the brand and product. not even know if they sell the toy anymore. it is not always about cross marketing. in other words, selling more toys by having the movie. in the case of lego, that's worked perfectly. i think studios have to be very strategic going forward about what products they will use. toclearly there is a need leverage brand recognition. my question is you have video game makers into making movies. angry birds movie coming out in
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2016. there is a long lead time. does that make it hard to capitalize on popularity? thing, is really the audiences are very fickle and it takes a long time to get a movie from conception to the big screen. if you pick a product that might be hot right now and not in two years you could really miss the boat. lego is time tested and people know that and it will be around forever and that kind of thing. >> that is true of artists on the big screen. seenl of the studios have a major success and marvel comics and superhero flicks. have we exhausted all of the household names and now we need to look for something bigger? >> i think you have nailed it right there. i think they're trying to find movie ideas and concepts anywhere they can.
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i do not know what is next. when i first heard about pirates of the caribbean's, i am like movie based on a theme park ride . several billion dollars later. there has been a great success with that. >> love it. johnny depp, the one and only. you make thet how money and what you do with it, not just the brand. likes and who is in it. >> thank you for joining us. a senior media analyst and l.a. >> it is perching 86 minutes past our which means it is time to go on the markets. u.s. stocks mixed right now. we had a four-day rally. the first in 2014. treasuries are down. treasuries will be auctioning off 10-year note's rate or on this afternoon. the euro weaker by a third of the dollar.versus
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speculation the ecb may consider negative deposit rates. wti up by 1.3%. stockpiles falling. domestic supply -- supplies walling. >> slowing growth concerns. bolling more than three percent, down more than 12% over the past month. the more people i talk to about amazon, none of them are feeling down but calling this a buying opportunity. >> they have found that a lot of the customers would not renew the prime membership it rises were increased. lex more people but against ups -- ubs than amazon. >> we will be back in a moment. we will have an exclusive interview with the president of the thing -- st. louis fed, james bullard. ♪
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live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. yellen's first day on the job. how did she do in congress and what will she do differently? we have an exclusive interview with the resident of the st. louis fed, james bullard. a tidal wave of do-it-yourself home renovators. the chain lands to hire 80,000 part-timers. he is building an empire on fermented milk. the thoughts of a man who convinced americans that they had to buy greek yogurt.
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the ceo of chobani. welcome to "market makers." i am stephanie ruhle. erik schatzker is off skiing, so scarlet fu is helping us in the newsroom. looking forward to your interview with james bullard. we want to turn to home depot. it is time for their annual hiring binge. they will add 80,000 part-time workers for the spring. we're going to bring in olivia sterns. this is a seasonal thing. home depot does this every year. >> every year. spring is their christmas. they always boost their numbers. 80,000 is exactly the number they added last time. this is the time of year when americans are in the mood to renovate. they trim the hedges, they decide to remodel their i imagine you might be in the mood to --
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>> i imagine your landlord is. >> home depot has been benefiting from rising home prices. things may be slowing down a the home depot shares have been lagging a little bit behind. largest u.s. the home improvement retailer. lowe's is the second-biggest. we got new numbers yesterday. the nationwide median price for a single-family home rose 10% in the last quarter. the average price is about $197,000. it has been helping home depot. the number is in line with the number they added last year. >> more than 80,000 employees will be hired this spring. how many turn into full-time
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jobs? >> they say this is when they do most of their recruiting. last year, 40,000 turned into full-time jobs. that will be good news for janet yellen. this is a company that is hiring. in results last december, sales grew 9.5%. have we seenilers that say sales grew 9.5%? there is still a buy on it. are they working on anything in particular for this year versus last year? >> they need people to run the registers, to be out in the garden centers. this year they are looking for people to be tech savvy because they have a new mobile shopping app. it helps you figure out where all the various products are in the stores. they have a store that is going to be one million square feet. that is enormous. if you go looking for some obscure nut and bolt, it will be tricky to track down.
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this app will help you find it. tech savvy employees for home depot. take so much. >> time for a little american dream. he is the king of greek yogurt. the yogurtonized business with his chobani products. five years later, they have reached $1 billion in sales and is the number one selling greek yogurt in america. welcome and congratulations. you are everywhere. not just in my refrigerator, not just in my grocery store, advertising, super bowl, oscars, olympics. why are you on a marketing offensive? >> we thought 2014 would be our year of branding. it is simple. people want great products. they were not available. once you make it accessible,
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people will buy it and share it. then you have a problem, can you make enough? we have been making sure the product is great and make sure that we can make enough. it is time to let more people know about us. >> what i think about who advertises at the super bowl, it is coca-cola. it is not a yogurt company. do you want to be in our homes and minds like a coke, not like a dan and -- dannon? >> i think it is a big day for the all-american families when they get together to watch the game. it is time for chobani or healthy products to come out into the living room, make it fun, make it be seen, and stay true to its identity. the tide is changing. you will see more brands coming
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out. we were very proud of that ad. it made the point. we kept it funny. we understand your sales? are you really selling in topeka, kansas and -- i don't know. who is buying your product? >> everyone. that is my dream. i did not want to make it only available in a luxurious place. >> you'll think of yourself as a luxury product? >> no. yogurt should be the last one to be one. it is not a watch. it is just a yogurt. it is a simple way and a natural way. it should be available. is it affecting your business that you will not be in
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whole foods anymore? it is important that good food is available everywhere. we have one belief. every consumer is important. they choose a different path, they made a couple of announcements. it is a small portion of our business. i do not want to be off any shelves, but they made a business decision and i respect that. >> what you do to make up those sales, now that you are not in whole foods? one thing i am happy -- where whole foods is, there are a lot of stores that carry chobani. people will buy them someplace else. we were not available in every , but i keeple foods
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doing what i do everyday. people make their decision. >> you are the first to get into this greek yogurt game. now the big guys like dannon are selling greek yogurt. how do you compete with that? >> the first time, as start up companies like us, in an old -- we started a category and let it to the end. we are still doing it. if you are big, it does not mean you can win. it gives inspiration to other startups. i want to tell all of my friends to make it good and make it good for everyone. the consumer is in power now. >> what is your next product? you want to stay in yogurt? people use greek yogurt in lieu of using hummus. you have reached another level.
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what will you make next? >> yogurt is just starting. we eat way less yogurt here in this country than in europe and other countries. there is so much to go. yogurt is just starting. key -- kids are keeping it in their lunch boxes. they say it is cool. this is the beginning of the yogurt story. role -- make delicious, nutritious, natural product for everyone. >> are people in greece eating your greek yogurt? we do not have it yet. we are in australia. we tested in london. we have two amazing plants in new york and idaho.
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i am so excited about -- because makingssionate about good food for the kids. you went toa reason the olympics? >> we sponsor team usa. it is a perfect type. -- tie. great idea, the execution, we are having a hiccup. are you speaking with the russians? >> i don't. we were caught up in this. we were shocked. we did it in london. they made shakes and food with it. we made a big day.
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the sponsorship started in the factory. all the people were excited, we packed it together. that was a day of holiday. ourthen we signed all of names into the palette and said here it goes to our athletes in sochi. one day we understood that there was a problem. still sitting in new jersey. >> is the yogurt going back? >> no. it is in a refrigerated warehouse. in the next couple of days we will have to make a decision. >> are politicians helping you? do you think it will get to russia? shaun white tried. we were so happy with him. it is still sitting in new jersey. you are a self-made
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billionaire based on this yogurt. is that why you wanted to sponsor the liv-ex? the olympics. >> it is amazing how much they give up and sacrifice. we did the same. we started in a tiny little town in upstate new york. >> i want you to tell me the whole story of how it began. hamdi ulukaya, the ceo and founder of chobani. we will be back with more in two. we will have exclusive with james bullard. you're watching a special day of "market makers." streaming on your tablet, your phone, and bloomberg.com. ♪
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>> i am back with hamdi ulukaya
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, the ceo and founder of chobani. yogurt, turned greek which meant nothing to anyone, into a massive business. i understand you are saying good food and consumers care about it, but how did you start this? hope other entrepreneurs now. ash help other entrepreneurs -- help other entrepreneurs now. i found out it is really simple. in theot -- i found out journey, of course. what i focused first is two years i lived in the fact that we make sure chobani is perfect. every minute, every second. factory workers to tell me if they liked the way it looked than everything else. ta how did you go from fe
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to yogurt? >> we grew up on yogurt. i knew there was not a good option in the market. andok for a you are first then found out there's a business opportunity. a craft plant was closing after 95 years. i bought it within fda loan and that is how it started. >> you bought it within fda loan? could you have done this in any other country? could you have built this business in turkey? >> no. this is the magic of this country. tiny town in upstate new york. five factory workers that work there for 15 years. we started painting the walls first. one thing i tell everyone, the magic in small towns of this country are still alive and strong. it is the most powerful thing of this country. >> are you hiring? >> we have 2000 people working.
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five factoryrom workers and you are still hiring? >> we are still expanding. it is the most amazing journey that i have ever been on. i want to pay attention to this -- manufacturing. build plants. let people do their magic. connect to the factories and the things that we make. >> should there be a manufacturing renaissance in this country? do.es, i without manufacturing, we are going to lose it. you have to connect to making things again. we have to go back to making things. about income inequality. you have become a self-made billionaire at a time when the poor people in this country are er than ever.
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what is your take on income inequality? >> i still live in upstate new york in the same house that i stayed in five years ago. i love it up there. what is magical here is the es can invest in the areas they left. the wealth will come back. i think we need to start fixing things for the long term. i am not an expert. >> is the government friendly to you? able are afraid to start businesses now. -- people are afraid to start businesses now. >> they shouldn't be. we should give an example of idaho -- how a government and a business can work together. licensesto get the faster. obamacare affecting the
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way you run your business? have great health insurance. we are making it better. i don't know the details much. >> are you concerned? some corporate leaders that the affordable care act is a problem. is it a problem for you? bigger problems. i have to make more yogurt. >> that is a high-class problem. >> you have many factory workers, do you think we need to raise minimum wage? >> yes, we do. if we can, we need to make life better for everyone. >> are you an american citizen yet? >> i want to be. >> we are going to sing the anthem over here. yogurt to get that
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russia. it is sitting in new jersey. my mother will have to take it. hamdi ulukaya, the ceo and founder of chobani. sitting downto be with james bullard. stay here. you're watching "market makers." it is a good day. ♪
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approaching 26 minutes past the hour. it is time to go "on the markets." the dow has reached its low.
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it is off by one third of one percent. that is about 15900 and 50. -- that is about 15,950. the nasdaq is up by 1/10 of one percent. the dow yesterday rose for a fourth straight day. that is the first straight winning streak in 2014. investors are weighing news out of companies like procter & gamble and amazon at the same time they are seeing optimism out of comments from janet yellen. she is staying on course with the fed's plan to taper stimulus. in terms of other asset classes, the government will be auctioning ten-year notes later on this afternoon. $24 billion of it. the yield is 2.76%. before that auction. the euro is weakening.
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oil prices have gone up a little bit. declining ine oklahoma. that is the backdrop. that also reported numbers show record and point -- record imports of crude oil. tripadvisor gained as much as 9.5%. it is up currently by seven percent. this is the consecutive quarter they have posted a positive earnings. there were a couple of upgrades on the heels of that as well. an exclusive interview with st. louis fed president, james bullard. this is a bloomberg television. we are streaming on your tablet, .our phone, and bloomberg.com we are now on apple tv. ♪
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>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. welcome back to "market makers." i want to welcome our listeners on bloomberg radio. we have a very special interview for everybody. james bullard is here. he is the president of the st. louis fed and our economics editor, michael mckee is joining us as well. join you andt to get your views on how things are going to turn out by the end of the year. janet yellen basically told us that things are status quo. , couple of bad jobs reports
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but tapering is underway. how do you reconcile what seems to be a contradiction -- the fed is pulling back, still stimulate in, but stimulating less and saying at the same time there is a lot more to do? >> i think she had it right in the testimony. we are buying. we are buying a lot of bonds. not quite as many as in december, but we are buying a lot. the economy is improving and things are getting better. if you look at fourth quarter jobs, about 195,000 a month, including the bad december report. down to six is point six percent. gdp growth in the second half of last year. we are looking at a stronger economy. i think we have momentum for 2014. i am not seen anything so far to dissuade me from that. >> is it fair to look at the jobs number as a data point when it does not factor in all of
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those jobs? participation has been declining, but i think that is mostly demographic factors. janet yellen was grilled on that in her testimony and i think she gave a balanced view of that. of this isot demographic factors. if you look at the long-term picture, labor force participation, 70's, 80's, 90's, going up. you have a theory that is going to give you the big hump shape and demographics is the big theory behind that. happens if you are wrong? what is the danger? thate danger would be labor markets are not as good as we are saying that they are. i interpretation would be that because labor force participation is mostly demographic and structural, that the decline in unemployment
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really is a good signal about labor market health. we can look broadly at lots of different label market indicators and make our own assessments about -- labor market indicators that make our own assessments about where it is. people interpreted the january report as not that great. what would cause you to change your mind on tapering -- either the pace or direction of it? modeldmit i do not have a , but i think it is partly weather. really? isn't that always cold in the winter? i struggle with that one. >> we are working with data that should not be in there anyway. out of seasonal stuff the data. it is always seasonally adjusted data. referring tover be the weather, but we always are.
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it is very sensitive to exactly where the weather hits, what parts of gdp, what kinds of shopping are affected. all of those kinds of stuff is sensitive to the weather. we know that. that can have a big impact on some of the numbers that we look at. you can the weather, think of that is being noise in the data. that will all come out as we go forward. >> there are no signals that would tell you that you want to change her mind or change at least the pace of tapering? >> no signals right now. >> what would be a signal? rightare on a good course now. we have been reducing at the last two meetings. we will make a decision on that as we meet going forward. it is not a preset course. we can adjust. the pace ofjust tapering in either direction, it would be a powerful signal. i think for that reason, we want to be careful about using that tool.
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we can use it if we have to. we reserve the right to take that up if the data comes in either way, stronger or weaker. >> if it is the weather, and we have the kind of outcome that you are looking for any economy, should investors assume that the fed is on autopilot through the rest of the year? you are not going to raise interest rates anytime soon. janet yellen made that clear. do we even need to tune in? >> autopilot is too strong. we do pay attention to the data. has notaying so far, it been enough to derail our plans. the plan is to move out of the qe program. the economy has been improving. it continues to improve. i expect 3% growth or better in 2014. i expect unemployment will continue to decline. i think we could be down at six percent or lower by the end of this year. that is really quite a bit better than what people were expecting when we announced the
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two we program in september 2012. >> as it relates to modulating the taper, how important is inflation? >> it has been a bit of a puzzle over the last year or so. it has continued to decline, even in the pace of a very accommodative monetary policy. i have been surprised by that. i'm expecting to be unsurprised this year. turn around will and inflation will go back to target. that is our forecast. if it does not, we're going to have to take that into account and face questions on inflation. i think it will be back towards 2. i have a 1.6 or 1.7 by the end of this year. >> what would drive inflation higher at this point? it does not look like we are getting any kind of energy shock. is the later -- labor market slack going to be taken up? >> i would expect improving economy to be a contributor, plus, reversal of what ever
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temporary factors have been pushing down on then laois and -- on inflation over the last year and a half or two years, some of that is global. this has been a global inflation hast been moving lower. europe has had lower inflation. we will see how this develops going forward. it is partly a wildcard. >> are you focused on the emerging markets turmoil? >> we pay a lot of attention on what is going on in the emerging markets. we are concerned about it. i think chair yelling got it right yesterday when she said that so far, -- chair yellen got it right when she said that she didn't see it would in pinch -- hurt the economy. >> is there anything you think
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she got wrong? nothing? >> she did a great job. we know her very well. she has been in the fed for a long time. she does a very good job of summarizing where the committee is sitting. i think she did a great job. also, a very long testimony. is she still testifying? i don't know. hit 6% byyment could the end of the year. inflation is moving up towards your 2% target by the end of the year. wendy raise interest rates? -- when do you raise interest rates? unemployment,t to we rarely win. i would like to mention that.
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if you get that scenario playing out where unemployment really rangeip down to in the 6% by the end of the year and inflation is moving back to target, you're talking about an to look aat is going lot more normal than what we're last two -- used to in the last five years. i think that is the scenario. if that continues to play out. >> hattie signal that? you have a 6.5% threshold which yellen has basically said that you can ignore. how do the markets know when you are ready to change policy? >> i think these thresholds have been useful. they have served a good purpose. coming through the unemployment threshold, it thes sense to say, ok,
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ability needed to do and now we will have to move to more traditional types of policy guidance. 8%n we were back at unemployment and unemployment willeclining, we did not to think we were going to raise rates while unemployment was at high. that is why we set the threshold. 6.5%?ould we ignore the >> no, i am saying they worked well during that period. i think the thing to do now is to go to more qualitative guidance. locative guidance will allow us to be more encompassing about the kinds of -- qualitative guidance will allow us to be more encompassing about -- that we want to be involved with. that is more of a traditional policy. in recent years, it has involved in -- even all in different ways.
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in different ways. does it come out in her statement, does it come out in her comments? how do we know when the fed is looking at a different scenario? >> i am sure everyone would like us to say there's going to be this number. way we normally approach monetary policy. way back when, what we used to do things in a normal way, we would have a much smaller statements that would say we're looking at everything in the economy, making a judgment about when to change interest rates, and that is how we would proceed. we are getting closer to the time when we can proceed in that way instead of in these extraordinary ways that we have used. >> what is the impact on the washington gridlock on the u.s. economy? during the shutdown, the impact for the investors was a positive. the dow was up over 250 points. for the real economy, the washington gridlock misery -- what is the effect?
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>> i think it is a bullish factor for 2014. we have some sort of accord andeen republicans democrats in washington. it is not so much the actual actions they took over the last two years or so, it is the brinksmanship and the constant uncertainty about what they might do that lead to a lot of uncertainty in the business sector. that made people very nervous. to get that out of the equation is really the last piece of the dragon in front of the u.s. -- the last drag in front of the u.s. economy. >> you'll have a whole new cast when you sit around the mahogany table for your next meeting. that is presuming people get confirmed. i do expect the fed to change under janet yellen?
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>> continuity. she has been there to make all of the policy judgments. she has been a great participants. she is a leading architect of the current policy. the numberng up from two spot to the number one spot. i would not expect a lot of change. i expect that to continue going forward. we also have new people coming .n to the committee one advantage of having a big committee is you have lots of experience around the table. new people can get up the learning curve and get up and running. >> is it hard to get things done with new faces? >> i don't think so. you have plenty of people with plenty of experience that are right there and can help me newer people along. >> do we get news conferences every meeting?
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a major change in a statement link? of one onbeen an army that. i think chairman bernanke should have gone to a press conference at every meeting. i want every meeting to be identical so that the committee, if it wants to, can take action at that meeting without feeling constrained. we have not had that in the last is co-years. it has been very uneven and people feel like we had to do something last year. we could not wait until july. why not? there was no press conference in july. if we are going to do something, it had to be in june. that can lead to a poor decision-making dynamic. i would like to see her go to a press conference at every meeting. i don't know if she will or not. i have advocated for this for quite a while. we will see if we can get it. >> if we're going to have to go
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to them -- to a more normal thece of policy, what is risk you end up behind the curve? was sayinggue yesterday there is a strong risk late to fed could be raise rates and we could see and inflation outbreak. >> that is always a risk in central banking. see if we get into that kind of a situation. i would be concerned if we got into that problem. is low right now. it would be a lot different if orlation was 3% today something like that. you would be more worried about getting behind the curve. >> michael, thank you for sharing this interview with me. james, thank you for sharing your thoughts.
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>> jim bullard. thank you so much for joining us. "market makers" will be back in just a moment. we have some final thoughts. stay with us. ♪
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>> welcome back to "market makers." i am stephanie ruhle. we sat down with jim bullard. what was your biggest take away? >> we have come to the end of the beginning and we are starting a new phase with the fed tapering -- >> end of the beginning? >> the beginning was the start of tapering back in december. we have gone to that point where it is an established fact that that will continue. the question is when do you look at the fed to raise interest rates? we have blown past the 6.5%
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threshold and that is no longer a guidepost to what policy is going to be. we have to look to what they say more closely than we have over the past couple of years because we do not have the number. >> is that fair? last spring chairman bernanke he unemployment, 7% we get there and then we hear jim bullard say that number doesn't matter. that is frustrating to me. >> it is frustrating to a lot of people, but it is the new reality. no one should sing -- think the fed is on the brink of raising interest rates. have to start thinking about how you're going to prepare yourself because you cannot sit down and say the fed will tell us when it will happen. you will have to figure out from the numbers. the old-style of qualitative measurement of what the economy is doing. how fast is a growing, how fast are we seeing inflation pickup and make judgments. we will look to things like fed
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funds futures as a guidance. >> will that make investing more difficult? last year, economists were frustrated. it didn't matter, cause all you needed to do was be long. >> not early in the year. maybe by the end of the year you start to think about it. for now, you do not have to worry about it because you are on the path. in march, weing, can probably expect another 10 billion, unless there is another surprise in the economy. did not like the word autopilot. here's my take away. you said autopilot, he did not like that. >> they do not want it to be too easy for investors. >> autopilot. jim bullard did not like that. you formckee, thank
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bringing jim here and for breaking it down. that is it for a very special day on "market makers." tomorrow, we're going to be cisco's ceo.h s ♪
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>> i am olivia sterns. we are dry -- diving into
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derivatives. --.ing me is we have seen -- let's start with the emerging markets. what are the options markets telling you today? it bounced off for about 6% or so. today we are seeing some more bullish activity. -- around $.37. it is 10% up from these levels. perhaps traders thinking the selloff was overdone? be what the fed indicates. i think this is an advance in the emerging markets. i am overall not sure about it. >> what about what we're seeing in the vix.
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what are you seeing in the vix options market? >> when the market was at the high of the middle of last month from a real -- to almost --. all of the futures rallied. now that the market has come off -- to are seeing futures the downside now. there is some downside left in the options index. one option stock traded today is tripadvisor, reported earnings before the bell. what is your take? lastw a move on expedia week when expedia was up 14%. from, after the results tripadvisor last night, the stock is up another few percentage points.
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we are seeing it almost hit the new high earlier and there is some activity, around 92.5 calls. 231% since february 2011. would you buy options at this price? >> i am seeing 92.5 calls active. i think the move for now is to stay on the sidelines. you have an options strategy on cisco. how are you going to play that? >> they have some problems. i am not sure they can sustain the pricing premium in the light of -- that is seeing. story -- ig markets am unsure about the recovery.
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we have to distinguish between emerging markets and the service providers. .here are some election years brazil is having elections. it is a wait and watch type of situation. i am concerned about what further guidance they give. i think they have given decent guidance and lowered expectations. next order might be even more. for this earning, i would like to play bearish. buy 32.5 puts around $.70. the commentary is somewhat negative. >> thank you for joining us with your bearish options call on cisco. we will have full coverage on bloomberg tv.
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we will be back in 30 minutes. in the meantime, "lunch money" is up next. ♪
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welcome to "lunch money," where we tie the best in business news. take a look at the menu today. talk clark -- blackrock's chief explains why. another exchange from the virtual currency. in the fed, we have the new boss, the taper, this is a bloomberg exclusive. batcave, and in sports, shaun white is grounded. the u.s. loses its best hope for gold.

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